MEEG reports 92% decrease in nine months net profit

September 14, 2020

Main Event Entertainment Group Limited (MEEG) for the nine months ended July 31, 2020 recorded a total of $944.59 million in revenue compared to $1.36 billion booked for the period ended July 31, 2019, a 31% decrease year over year. Revenue for the quarter declined drastically by 87% to close the quarter at $59.78 million relative to $468.61 million booked for the corresponding period in 2019.

Direct expenses for the nine months decreased 31% year over year to $521.30 million relative to $760.84 million recorded in the prior corresponding period. Gross profit for the period thus reduced by 30% to $423.29 million (2019: $603.61 million). Gross profit for the quarter decreased 79% from $197.83 million in 2019 to $40.57 million. MEEG booked other income of $530,000 for the nine months, $13.63 million lower than the prior year’s corresponding period of $14.16 million.

Total expenses declined by 18% to $403.25 million versus $491.86 million recorded for 2019. Of this, administrative and general expenses fell 24% to $299.99 million (2019: $395.73 million), while depreciation expense increased 14% to $94.78 million (2019: $83.46 million). Selling and promotion expense declined by 24% to $8.47 million relative to $12.66 million booked last year. Total expenses for the quarter amounted to $83.50 million, 54% lower relative to last year’s comparable quarter of $182.19 million.


Consequently, operating profit for the period declined 84% to $20.57 million (2019: $125.90 million). Operating loss for the quarter amounted to $42.78 million versus a profit of $23.16 million booked July 2019.

Finance cost year over year, decreased by approximately 30% to $12.46 million (2019: $17.81 million) at the end of July 2020.

MEEG recorded profit before taxation of $8.11 million, a significant reduction of 92% when compared to last year’s corresponding period of $108.09 million. However, loss before tax for the quarter closed at $47 million relative to a profit of $14.73 million.

The company reported tax credit of $562,000 during the period, resulting in net profit totalling $8.67 million, a 92% decrease year over year (2019: $108.09 million). MEEG reported net loss of $45.54 million for the third quarter versus a profit of $14.73 million for the comparable period in 2019.

Earnings per Share (EPS) for the nine months amounted to $0.03 (2019: $0.36), while for the quarter the company booked a LPS of $0.15 relative to an EPS $0.05 in 2019. The trailing LPS amounted to $0.01. The number of shares used in the calculation was 300,005,000 units. Notably, MEEG stock price closed the trading period on September 11, 2020 at a price of $3.50.

MEEG noted, “Our results for this quarter and for the nine-month period ended July 31, 2020 have been significantly impacted by the on-going global pandemic.” Also “We have been Challenged to weather a very unfavourable environment for our industry, with government imposed social distancing protocols and shutdown of outdoor events. As a result, both revenues and profitability have retracted significantly.”

Balance Sheet Highlights:

As at July 31, 2020, the company’s assets totalled $848.69 million (2019: $1.06 billion), $211.59 million less than its value a year ago. This decrease in total assets was largely driven by a decrease in ‘Receivables’ which declined by 80% or $330.03 million year over year to $75.11 million (2019: $375.14 million). ‘Due from related companies’ also contributed to the downward movement with a 66% decrease from $44.06 million booked as a July 31, 2019 to $14.80 million.

Equity attributable to stockholders of the company amounted to $560.51 million (2019: $631.08 million). This translated to a book value per share of $1.87 relative to $2.10 for the corresponding period in 2019


Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.